New Zealanders might be paying more at the pump again next year with the Government unlikely to extend cuts to fuel excise duty, a prominent economist believes.
The Government was expected to announce on Wednesday whether it would extend the fuel tax cuts, as well as road user charge and public transport fare subsidies, which were due to end on January 31.
"If the Government wanted to extend that fuel tax subsidy, they would have to do it and put legislation through the House by 6pm today," Infometrics principal economist Brad Olsen told AM Early on Wednesday. "That seems fairly unlikely given that they've had a long time to prep it but nothing's come through."
Olsen noted the fuel tax subsidy was providing three times as much support to those who didn't need financial assistance versus those New Zealanders on the lowest incomes.
"I do expect the Government to decide not to proceed with any further extensions to the fuel tax subsidy," he said.
"The question then becomes, as we head into next year, is the Government putting anything on the table to help Kiwis through what is still an intensely high-inflation environment?"
New Zealand's annual inflation was 7.2 percent in October, a near three-decade high.
Fuel excise duty, road user charges and public transport fare cuts were first introduced by the Government in March to help New Zealanders with the rising cost of living. The scheme had since been extended twice.
A Newshub-Reid Research poll last month found 84.1 percent of New Zealand backed the Government extending the subsidies.
However, extending the fuel excise duty and road user charges cuts from August to January was estimated to have cost the taxpayer about $589 million.
The Government was warned by Treasury earlier this year not to extend the cuts to January but it went ahead and did so anyway.
Treasury will on Wednesday deliver its half-year economic and fiscal update.
